Matthias Monroy

Customs authorities are seen as „gatekeepers of EU borders for the flow of goods“. They increasingly rely on „risk analysis“ and new information systems. Now the EU customs cooperation with police and border authorities will be enhanced.

Since 1968, the European Economic Community has been a Customs Union for industrial products, and from 1970 for agricultural products as well. All customs formalities at the internal borders of the member states have been dropped. Even the level of customs duties at the external borders, on which all countries had previously decided on their own responsibility, has since been regulated by a common customs tariff.
The framework for today’s EU customs union is the Union Customs Code (CCC) adopted in 1992. It provides uniform rules for customs tariffs on imports from outside the EU. The European Commission constantly proposes updated customs regulations and monitors their implementation. The Directorate-General for Taxation and Customs Union (TAXUD) in Brussels has responsibility for this. It also operates the tariff system (TARIC3), which displays the current rates.

Customs duties are generally paid where the goods first arrive. The revenue generated is considered the EU’s “traditional own resources” and covers around 14 percent of its total budget. The member states retain 20 percent of this amount for expenses incurred by their customs authorities and their control activities. In 2016, for example, the EU collected around 25 billion euros in customs duties, leaving 20 billion after deduction of national expenditure. In the last three years, around four billion euros of the total revenue came from Germany.

The customs authorities of the member states are also responsible for preventing, investigating and prosecuting infringements – both of EU customs and agricultural rules and of national regulations. The latter include, in particular, rules on controlled or prohibited goods, such as (illegalised) drugs, weapons of war or dual-use goods, and corresponding provisions in (secondary) criminal law. Mutual administrative assistance between EU customs authorities was accordingly regulated in parallel in 1997 in two different legal texts: on the one hand in a regulation in the then 1st pillar of the EU (internal market) and on the other hand in a treaty in the then 3rd pillar (justice and home affairs), the Naples II Convention, which not only allows a comprehensive exchange of information but also “special” forms of cooperation: the formation of joint investigation teams, cross-border hot pursuit and surveillance, controlled deliveries and covert investigations.

No customs agency

Unlike in the field of external border management or police cooperation, there is no central EU agency in the customs field. Instead, the customs authorities of the Member States, which the Commission refers to as the “gatekeepers of EU borders for the flow of goods”, are supposed to “work together as if they were one”.

In certain areas, the European Anti-Fraud Office (OLAF), another Directorate-General of the EU Commission, assumes a coordinating role. The Office provides customs authorities with a “permanent technical infrastructure” to support “Joint Customs Operations” (JCO). In some cases these actions are also coordinated by OLAF. These are targeted surveillance and control operations along specific trade routes or in relation to specific goods. There are also “Joint Customs and Police Operations” (JCPO), in which Interpol and Europol also participate where appropriate (like RADAR (2012), ARES (2016), ARMSTRONG IV (2017), COLUMBUS (2018)). Customs authorities also participate in Frontex Joint Action Days (like DANUBE, MOBILE, OLYMPUS; according to Frontex, 6,800 irregular migrants and 177 migrant “smugglers” were identified, and 12 tonnes of tobacco, 825,000 cigarettes and 1.9 tonnes of “various drugs” were confiscated).

The World Customs Organisation (WCO) also sometimes plays a coordinating role in such large-scale operations. Founded in 1953 as the Brussels Customs Council, the WCO now comprises 179 national customs administrations, including those of the EU Member States and, since 2007, the EU itself. The WCO’s objectives include facilitating global trade and combating cross-border crime. To this end, the WCO cooperates with Interpol and Europol, with whom the organisation concluded Memoranda of Understanding in 1998 and 2002 respectively. Such an agreement, which is not public, also exists with OLAF.

The majority of EU Member States’ “Joint Customs Operations” continue to be organised by the participating customs authorities themselves. Planning and follow-up are carried out in the Council Working Party on Customs Cooperation (CCWP), which, among other things, defines “the strategic and tactical objectives”. The customs authorities work closely with the Standing Committee on Operational Cooperation on Internal Security (COSI) and with Frontex. In the CCWP, new Action Plans with new measures are adopted every two years. While the CCWP deals with operational cooperation, the Council Working Party on the Customs Union (CUWP) deals mainly with customs law issues.

Regional Contact Groups

The Council has also set up teams of experts for various regions to ensure “practical cooperation and coordination” between customs administrations. For example, the CELBET group is responsible for the eastern and south-eastern external customs borders. Similar groups exist for the responsible authorities at the external land borders and at major ports and airports (RALFH for large northern EU ports, ODYSSUD for southern ports, ICARUS for large airports). The Land Frontier Contact Group (LFCG), for example, is responsible for 250 border crossings and brings together 16 countries with EU external land borders (Austria, Bulgaria, Croatia, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Romania, Slovakia and Sweden; also Switzerland).

The most frequently used route for imports and exports to and from the EU is maritime transport, followed by air and road transport. In 2016, national customs authorities received a total of almost 313 million customs declarations, which were processed by more than 2,000 national customs offices. A total of 114,000 customs officers work at airports, border crossings, ports and domestic customs posts, and national authorities also operate 90 customs laboratories. Their tasks include the control of illegal and/or dangerous goods, including prohibited narcotics, suspect foodstuffs, explosives or large amounts of cash. In 2016, the authorities seized 299 tonnes of drugs, 4.6 billion illegally imported cigarettes and 6,256 firearms.

“Risk-based” customs control

Foreign trade and thus also imports and exports to and from the EU are continuing to increase. More than 300 million freight items are expected to be transported annually by all means of transport, plus up to one billion postal and express items. Under the EU Customs Code, all goods entering, passing through or leaving the EU customs territory, including goods carried by or on persons, are subject to risk-based customs supervision. The tasks of the Regional Contact Groups therefore include the exchange of risk information on which Member States base their customs controls. For this purpose, the authorities use the Common Risk Management Framework (CRMF). On the basis of common risk criteria, electronic declarations are processed with a “proactive” freight risk analysis. Responses to these, which may involve several Member States, are coordinated through the Customs Risk Management System (CRMS).

All transporters must declare their shipments electronically to the competent customs office of entry. The declaration is recorded and processed in the decentralised European Import Control System (ICS). It is currently being converted as ICS2 to an electronic, paperless environment for import, export and dispatch procedures. In future, the new system will centrally store freight data in air, sea, rail and road transport. Preliminary information includes data on all persons involved in the sale, transport or shipment of the goods, as well as information on the companies where the freight was packed or stored and the means of transport used.

The Council Working Party on Customs Cooperation is now discussing ways of extending the scope of freight risk analysis. This includes the improved processing of risk criteria for electronic advance freight declarations in ICS2. The incoming information is to be analysed using data mining technologies. Similar to the EU Passenger Name Record (PNR) system, the ICS2 will analyse the advance information to identify “serious security risks” arising from international movements of goods before they reach the EU’s external borders. The ICS2 uses algorithms to find hidden patterns or other anomalies and compares the data with entries in databases. Findings are also derived from the “Container Status Reports” file, which contains information on the physical movements of each container entering or leaving the EU by ship. Similar databases also store in a decentralised manner other goods imported or exported.

Data repositories of the EU customs authorities

The Customs Files Identification Database (FIDE) has been in place at OLAF since 1995. Similar to the Europol Information System, this is an index file of the customs authorities. It stores natural and legal persons suspected of having committed “operations that are in breach of customs or agricultural legislation” or “serious infringement of national laws”. It enables the authorities to find out whether persons or companies have been the subject of investigations or convictions in other Member States.

Goods or means of transport and persons for which alerts have been issued are stored in the Customs Information System (CIS), which was set up in 1997 and is also managed by OLAF. Similar to the Schengen Information System (SIS II), the central CIS is a file with various possibilities for issuing alerts, which can be used to search for data in other Member States or to ask the authorities there to take action on specific goods, companies, means of transport or persons. The use of the CIS is now also to be extended. The competent authorities are to make their entries more carefully and enter “one seizure-one report” into the system.

In principle, national customs authorities will also be able to query the SIS II, the Visa Information System and Europol data. However, this non-automated, read-only access is regulated differently in the Member States. In many countries, the SIS may only be used for customs related criminal investigations. However, the German Customs Criminal Investigation Office may also create entries there itself.

Interlinking with “internal security”

Already in 2011, the EU had described the development of cooperation with police and border authorities in the “Strategy for Future Customs Law Enforcement Cooperation”. The objectives at that time included increasing security and safety and improving the administrative capacity of customs authorities. In the Customs 2020 programme, national customs authorities received 547.3 million euros to improve and support existing information systems and develop new ones.

The involvement of customs authorities in the “protection of internal security” has been reaffirmed by the General Secretariat of the Council on several occasions since last year. The “gatekeepers for the flow of goods” therefore play a “valuable role” in the fight against terrorism and organised crime. In a note entitled “Enhancing customs contribution to internal security” the Bulgarian Presidency proposed measures in three areas in which customs should contribute even more to a high level of internal security in the EU: institutional cooperation, operational cooperation and exchange of information.

For example, customs systems are to be connected to the ” Interoperability ” project, in which the EU is currently re-sorting and partially merging all biometric databases in the field of Justice and Home Affairs. Initially, the High Level Expert Group on Information Systems and Interoperability (HLEG), set up by the Council, proposed this integration of customs systems into the “Interoperability” project. In its final report two years ago, HLEG recommended that the Commission carry out a feasibility study to further explore the technical, legal and operational aspects of interoperability with customs systems.

Participation in EU security research

Customs authorities do not have direct access to the data of the European PNR system in all Member States. The German customs administration for example only receives information from the German Passenger Information Unit (PIU) in the event of relevant hits in individual cases. HLEG’s plans therefore also include integrating the information from the customs risk analysis into the processing of PNR data. The World Customs Organisation is to draw up guidelines for this purpose.

After “Customs 2020” the EU has launched a new “Customs” programme, and the EU Parliament and the Council are currently discussing a corresponding regulation. A large part of the money will probably be spent on new information technology. The EU Commission has proposed that customs authorities receive additional financial assistance for control equipment from the Integrated Border Management Fund. It promotes the use of new “modern techniques” for customs, including detection technologies and non-invasive control equipment. A particular focus is on “high-risk cargoes” that have been identified as suspect following a declaration in the import control system. According to the plans, customs authorities will in future participate as end-users in the security research projects under the Horizon 2020 framework programme, which are actually aimed at law enforcement authorities.

More Joint Centres

The “Customs 2020” and “Customs” programmes also call for more cooperation with other EU agencies and international organisations. They also demand the extension of the application of the Naples II Convention on mutual assistance and cooperation between customs administrations to provide a legal basis for “special” forms of cooperation between law enforcement and judicial authorities. The EU has defined corresponding measures in the “Operational Action Plans” of the European Multidisciplinary Platform against Criminal Threats (EMPACT).

Since the 1990s, the EU member states have established so-called Police and Custom Cooperation Centers (PCCC) at their internal borders. Their legal basis is provided by bilateral agreements based on Article 39 of the Schengen Convention. They are intended to promote the collection and exchange of information, simplify the processing of requests from partner countries and facilitate joint cross-border operations. There are currently 59 such joint centres throughout the EU and the Western Balkans, and their number should now also be increased.

Liaison officers at Europol and Frontex

Inter-agency co-operation is now being strengthened and the Council Working Party on Customs Cooperation is expected to develop a strategy and action plan for implementation. The hoped-for synergies between customs and law enforcement authorities include, for example, a common approach to risk management. Customs information could, for example, be used to track down irregular migrants or suspected traffickers. Member States should ensure the success of the strategy by giving their customs authorities “the powers to implement the recommendations to the greatest extent possible in order to ensure the strategy’s success”.

The extended cooperation concerns, among others, Europol. All customs authorities are to be linked to the exchange of information via the Europol system SIENA; so far less than half of the national customs administrations have access to it. The Member States are also to participate in the “Multidisciplinary Platforms” at Europol. These include the Centre for Combating the Smuggling of Migrants (EMSC) and the Anti-Terrorism Centre (ECTC). The national customs administrations are therefore to send customs liaison officers to the liaison offices at Europol; this too is currently only practised by half of the Member States.

Customs should also cooperate more closely with the European border agency Frontex. The Council Working Party on Customs Cooperation is also active in this area and Frontex regularly participates in its meetings. Customs officers are to participate in Frontex operations and plans include joint training of border guards and customs officers in “areas of common interest”. A regular exchange of risk analyses and joint work on new data collection, processing and analysis methods is foreseen.

Customs authorities could also use “Eurosur Fusion Services”, which Frontex uses to monitor the EU’s external borders using satellites, aircraft and drones. To this end, Member States should send liaison officers within their customs authorities to the national coordination centres of the EUROSUR system. In order to link up with the National Coordination Centre run by the Federal Police in Germany, the customs administration opened a liaison office in Stralsund this summer.

Integration of third countries

Finally, the “Strategy for Future Customs Law Enforcement Cooperation” provides for national customs authorities to undertake joint activities with customs administrations or authorities in third countries dealing with customs matters. Some non-EU countries already participate in “Joint Actions” by EU customs authorities. These cover candidate and potential candidate countries of the EU as well as candidate and potential candidate countries, including authorities from Albania, Macedonia, Montenegro, Serbia and Turkey.

This cooperation could increase significantly in the future and be extended to countries of the European Neighbourhood Policy. The EU has seconded ” Permanent Delegations” to numerous partner countries, which are now to assist the EU gatekeepers in “strengthening operational cooperation”.

Image: Border guards taking part in Frontex operations conduct joint controls and share of information and intelligence with customs officers (Frontex at “International Customs Day” on Twitter).